Why Open a Bank Account in China?

For British citizens relocating to China or engaging in business there, a local bank account is essential for seamless financial management. China’s cashless economy, dominated by mobile payment platforms like WeChat Pay and Alipay, relies heavily on local bank accounts for transactions, from paying bills to online shopping on platforms like Taobao. In 2025, China’s e-commerce market is valued at US$2.1 trillion, with 70% of retail sales occurring online, making a bank account critical for daily life. A local account also simplifies receiving salaries, paying rent, and managing cross-border payments in Renminbi (RMB). As Kristina Koehler-Coluccia, Head of Business Advisory at Woodburn Accountants & Advisors, notes, “A local bank account greatly simplifies life in China, offering access to services that foreign cards often can’t provide”.

Step-by-Step Guide to Opening a Bank Account

Opening a bank account in China as a foreigner involves specific requirements and procedures. Below is a clear, step-by-step guide tailored for British citizens, based on the latest 2025 regulations and practices.

Step 1: Confirm Eligibility

Foreigners, including British citizens, can open bank accounts in China, but eligibility depends on visa status. You must hold a valid visa with at least six months’ validity, such as a Z work visa, X student visa, or L long-term private affairs visa. Tourist visas (L visas for short stays) are typically not accepted. You must also be physically present in Mainland China, as remote account opening is rare, except through international banks like HSBC in specific cases.

Step 2: Choose a Bank

China’s banking sector includes major state-owned banks, commercial banks, and international institutions. For British citizens, the “Big Five” banks, Bank of China (BOC), Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), and Bank of Communications (BOCOM), are popular due to their extensive branch networks and English-language services in major cities like Beijing and Shanghai. International banks like HSBC, Citibank, and Standard Chartered offer familiarity and multi-currency accounts but may have stricter requirements, such as a minimum balance of £15,000 for HSBC Advance accounts.

Consider factors like branch accessibility, digital banking capabilities, and fees. For example, ICBC’s WeChat Banking service allows account management via WeChat, while BOC offers a Current All-In-One Account for multi-currency transactions.

Step 3: Gather Required Documents

Chinese banks enforce strict “Know Your Customer” regulations, requiring a comprehensive set of documents. Prepare the following, ensuring originals and photocopies are available:

• Valid Passport: Your primary identification document, with the name matching exactly across all documents to avoid delays.
• Chinese Visa or Residence Permit: A valid visa or temporary/permanent residence permit, with at least six months’ validity.
• Proof of Address: A rental agreement, utility bill, or Temporary Accommodation Registration Form from the local Public Security Bureau.
• Chinese Mobile Phone Number: A local number registered in your name for verification and communication.
• Proof of Employment or Study (if applicable): An employment contract, letter from your employer, or admission letter from a university for students.
• Police Clearance Form (sometimes required): A registration form from the local police station, particularly for new arrivals.

Some banks may request additional documents, such as a Taxpayer Identification Number (e.g., National Insurance Number for UK citizens) for cross-border transactions.

Step 4: Visit a Bank Branch

In-person visits are mandatory for most Chinese banks, as online account opening is limited. Choose a branch in a major city, where staff are more likely to speak English and be experienced with foreign clients. Schedule an appointment if possible, and bring a Chinese-speaking friend or interpreter if you’re not fluent, as application forms may be in Chinese.

At the branch, approach the information desk and tell them you would like to open a bank account. Staff will provide an application form and guide you through the process. Expect identity verification and document checks, which may take over an hour.

Step 5: Select an Account Type

Choose between a savings account (for daily expenses and electronic payments) or a multi-currency account (for international transactions). Debit cards are standard, linked to mobile payment platforms, while credit cards are less common for foreigners. Most savings accounts charge an annual fee of around 10 RMB (approximately £1.10), automatically deducted from the account.

For business owners, corporate accounts require additional documentation, such as a Business Licence and proof of state approval for foreign-invested enterprises. These accounts face stricter compliance checks and may take weeks to process.

Step 6: Make an Initial Deposit and Pay Fees

Most banks require an initial deposit, typically 40–50 RMB (£4–£5), though some, like CCB, may require higher balances (and up to 50,000 RMB for certain accounts). A registration fee of 40–50 RMB is also standard. Carry extra cash (around 100 RMB) to cover unexpected costs.

Step 7: Receive Your Bank Card and Set Up Mobile Payments

Once approved, you’ll receive a debit card and account details, typically within one to two weeks, though some banks issue cards on the spot. Link your account to WeChat Pay or Alipay for seamless transactions, as cash is rarely used in urban China. Activate online banking or mobile apps for account management. Be cautious with security, using two-factor authentication to protect against fraud.

Practical Tips for Success

• Visit Major Cities: Branches in Beijing, Shanghai, or Guangzhou are more accustomed to foreign clients and often have English-speaking staff.
• Check Visa Validity: Ensure your visa has at least six months’ validity to avoid rejection.
• Be Patient: Some branches may lack experience with foreigners, requiring multiple visits or additional documents.
• Explore Alternatives: If opening a local account is challenging, consider a Wise or Revolut account for low-fee, multi-currency transactions, manageable from the UK before your move.
• Understand Restrictions: Some banks limit international transfers or currency conversions, especially during government restrictions on foreign currency reserves.

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On 7 May 2025, China’s financial authorities, led by the People’s Bank of China (PBOC), announced a sweeping 10-point monetary policy package designed to bolster market confidence and support economic stability. Unveiled at a joint press conference with the National Financial Regulatory Administration (NFRA) and the China Securities Regulatory Commission (CSRC), the measures respond to global economic uncertainties, including heightened US tariffs and domestic restructuring challenges. For British businesses, this package signals both opportunities and complexities as China seeks to maintain its position as a global economic powerhouse while fostering a more resilient domestic market.

The package, described by PBOC Governor Pan Gongsheng as a “coordinated” effort, includes a range of tools aimed at injecting liquidity, lowering borrowing costs, and supporting innovation-driven growth. Key among these is a 10-basis-point cut in the 7-day reverse repo rate, from 1.5% to 1.4%, and a 25-basis-point reduction in interest rates for structural monetary policy tools. Additionally, the PBOC has lowered the reserve requirement ratio (RRR) for banks, freeing up capital for lending, particularly to small and medium-sized enterprises (SMEs) and technology-driven firms. These steps, as reported by CGTN, are intended to stabilise market expectations and shore up economic momentum amidst external pressures.

China’s economic context underscores the urgency of these measures. The country has faced significant headwinds from a second trade war with the United States, with US tariffs impacting exporters and global trade dynamics. Bloomberg notes that Beijing’s response includes not only monetary stimulus but also efforts to mobilise medium- and long-term capital to support domestic industries. The package also introduces new financing tools for tech enterprises, reflecting China’s ambition to lead in sectors like artificial intelligence and green energy. For UK firms, particularly those in technology or manufacturing, these initiatives could open doors to partnerships or market entry, provided they navigate the accompanying regulatory landscape.

A notable aspect of the package is its focus on supporting SMEs, which are critical to China’s economic fabric. Enhanced financing mechanisms, including targeted loans and bond issuance support, aim to bolster these businesses, many of which have been hit hard by global market volatility. The CSRC has also outlined plans to deepen capital market reforms, encouraging listings by high-tech firms and improving market access for institutional investors. According to Reuters, these reforms are partly a tactical response to US trade pressures, aiming to reduce reliance on external markets. For British SMEs, this could mean increased opportunities to collaborate with Chinese counterparts, particularly in consumer goods and services, where demand remains strong.

However, the package is not without its challenges. While the monetary easing is designed to stimulate growth, it also raises concerns about potential inflationary pressures and asset bubbles, particularly in China’s property sector, which has been a focal point of economic strain. The South China Morning Post highlights that the government is simultaneously rolling out measures to stabilise the job market and boost domestic consumption, indicating a multi-pronged approach to economic recovery. For UK businesses, this dual focus on stimulus and stability suggests a market that is both dynamic and unpredictable, requiring careful strategic planning.

The international backdrop adds further complexity. The package comes at a time when China is pushing for greater internationalisation of the yuan, capitalising on volatility in the US Treasury market. A survey by Renmin University’s International Monetary Institute indicates growing enterprise interest in using the yuan for international settlements, a trend that could reshape trade dynamics. For British firms, this shift may necessitate adjustments in payment and financing strategies, particularly for those engaged in cross-border trade. The CBBC advises UK companies to leverage local expertise to navigate these changes effectively.

The package also aligns with China’s broader geopolitical and economic strategy. Reports from Yahoo Finance suggest that China has agreed to suspend certain non-tariff barriers to US imports, hinting at a potential de-escalation of trade tensions. This development, coupled with the monetary measures, reflects Beijing’s intent to balance domestic priorities with global engagement. For UK businesses, this creates a window of opportunity to engage with a market that is actively seeking to diversify its economic partnerships, particularly in sectors like education, healthcare, and green technology, where British expertise is well-regarded.

For British companies, the implications of the 10-point package are significant. The emphasis on technology and innovation opens avenues for UK tech firms to explore collaborations, though increased regulatory scrutiny in high-tech sectors, as seen in the 2025 Negative List for Market Access, necessitates robust compliance measures. The healthcare sector, buoyed by China’s focus on domestic consumption, presents opportunities for British pharmaceutical and medical device companies to tap into a growing market. Similarly, the easing of financing for SMEs could facilitate joint ventures or supply chain partnerships, particularly for UK firms in consumer goods, where China’s middle class continues to drive demand.

The UK-China economic relationship provides a strong foundation for capitalising on these opportunities. The CBBC underscores the potential for British SMEs to benefit from China’s expanding consumer market, though success hinges on understanding local regulations and building strategic partnerships. The monetary package, by enhancing liquidity and market access, could amplify these opportunities, but firms must remain vigilant about competitive pressures and policy shifts.

Critics of the package argue that while it addresses immediate market concerns, it may not fully resolve deeper structural issues, such as China’s reliance on debt-driven growth or vulnerabilities in its property sector. Bloomberg notes that monetary policy alone cannot address all economic imbalances, particularly in a global environment marked by trade disruptions. For UK businesses, this underscores the need for a long-term perspective, balancing short-term gains from market openings with caution about macroeconomic risks.

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China has unveiled its 2025 Negative List for Market Access, marking another stride in its ongoing efforts to open its economy to both domestic and foreign investors. Published by the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) on 25 December 2024, the updated list reduces the number of restricted sectors and refines regulations to foster a more unified national market. While this development signals Beijing’s commitment to liberalisation, it also introduces new oversight for emerging industries, reflecting a cautious approach to balancing economic growth with regulatory control. For British businesses eyeing opportunities in China, understanding the nuances of this list is crucial for navigating the evolving market landscape.

The Negative List for Market Access, first introduced in 2018, serves as a cornerstone of China’s market reform strategy. Unlike the Foreign Investment Negative List, which specifically governs foreign investors, the Market Access Negative List applies to all entities—domestic and foreign—operating within China. It delineates sectors where investment is either prohibited or restricted, with the latter requiring special approvals or compliance with specific conditions. The 2025 iteration, effective from 1 February 2025, reduces the total number of restricted and prohibited items from 123 to 115, a modest but significant step towards easing market entry barriers. This reduction follows a trend of gradual liberalisation, with the 2021 list having cut entries from 131 to 123.

A key feature of the 2025 list is the removal of several longstanding restrictions. Notably, the requirement for domestic equity holding in certain manufacturing sectors has been lifted, allowing greater flexibility for foreign investors. Restrictions on investment in traditional Chinese medicine production and the operation of performance venues have also been relaxed, opening avenues for cultural and health-related enterprises. These changes align with China’s broader economic goals, including boosting domestic consumption and supporting small and medium-sized enterprises (SMEs), as outlined in the NDRC’s accompanying statement. For British firms, particularly those in healthcare or cultural industries, these adjustments could unlock new opportunities to engage with China’s vast consumer base.

However, the liberalisation is tempered by new regulatory measures targeting emerging sectors. The 2025 list introduces stricter oversight for industries such as drones, internet services, and artificial intelligence (AI). Investments in these areas now require additional approvals, reflecting Beijing’s intent to safeguard national security and maintain control over rapidly evolving technologies. This move comes amidst global concerns about data privacy and technological sovereignty, with China’s Ministry of Industry and Information Technology (MIIT) emphasising the need for “secure and controllable” digital infrastructure. For UK tech companies, this heightened scrutiny may pose challenges, necessitating robust compliance strategies to navigate the regulatory landscape.

Beyond the list itself, the NDRC and MOFCOM have launched a nationwide campaign to dismantle hidden market access barriers. This initiative aims to address local protectionism and inconsistent regulations that have long frustrated businesses operating across China’s diverse provinces. The campaign, set to run through 2025, will focus on streamlining administrative processes and ensuring that national policies are uniformly implemented. According to a report by Bloomberg, this push for a unified market is part of China’s response to external pressures, including the recent US-China trade war, which has underscored the need for a resilient domestic economy. For British businesses, a more consistent regulatory environment could reduce operational uncertainties, particularly for those establishing supply chains or distribution networks across multiple regions.

The timing of the 2025 Negative List’s release is noteworthy, coinciding with a period of economic recalibration for China. The country has faced challenges from US tariffs and global market volatility, prompting Beijing to bolster domestic growth through monetary stimulus and market reforms. The People’s Bank of China recently cut its policy rate and lowered reserve requirements to support an economy strained by external trade pressures. Against this backdrop, the Negative List serves as both an economic signal and a practical tool, reassuring investors of China’s commitment to openness while addressing internal structural issues.

For British companies, the implications of the 2025 Negative List are multifaceted. Sectors such as education, where restrictions on foreign-invested institutions have been eased, present opportunities for UK universities and training providers to expand their footprint in China. Similarly, the relaxation of rules in the healthcare sector, particularly around traditional Chinese medicine, could attract British pharmaceutical firms interested in collaborative research or market entry. However, the increased scrutiny of tech-related investments underscores the importance of due diligence. Partnering with local firms or leveraging the expertise of the CBBC can help mitigate risks and ensure compliance with China’s complex regulatory framework.

The broader context of UK-China economic relations also shapes the significance of the Negative List. Despite geopolitical tensions, trade between the two nations remains robust, with UK exports to China reaching £28.5 billion in 2024, according to the UK Department for Business and Trade. The CBBC has highlighted China’s consumer market and growing middle class as key drivers for British SMEs, particularly in consumer goods and services. The 2025 Negative List, by reducing barriers in these sectors, aligns with these opportunities, though firms must remain vigilant about local competition and evolving regulations.

Critics argue that while the Negative List represents progress, it falls short of transformative reform. Some sectors, such as telecommunications and financial services, remain heavily restricted, limiting foreign participation. The introduction of new controls in high-tech industries has also raised concerns about regulatory unpredictability, particularly for firms reliant on innovation-driven growth. China’s balancing act between liberalisation and control reflects its broader strategy of fostering economic self-reliance while engaging with global markets. For UK businesses, this duality necessitates a strategic approach, balancing optimism about new opportunities with caution about regulatory hurdles.

China’s 2025 Negative List for Market Access is a step towards greater economic openness, offering British businesses new avenues for investment while introducing challenges in emerging sectors. By reducing restricted sectors and tackling local barriers, Beijing is laying the groundwork for a more integrated national market. For UK firms, success in this evolving landscape will depend on thorough market research, strategic partnerships, and a keen understanding of China’s regulatory priorities. As China navigates global economic headwinds, the Negative List underscores its determination to remain a key player in international trade, inviting British businesses to engage with its dynamic market while adapting to its unique challenges.

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China’s economic allure, with a projected GDP growth of around 5% for 2025, continues to draw global investors, including British firms seeking to tap its vast consumer base and innovation-driven markets. However, the country’s foreign investment regime, governed by the Foreign Investment Law (FIL) of 2019, balances openness with stringent controls, particularly in sectors deemed sensitive to national security or cultural identity. For UK businesses, navigating these restrictions is essential to unlocking opportunities in a market where bilateral trade reached £111 billion in 2022.

The Framework: Foreign Investment Law and Negative Lists

Enacted on 1 January 2020, the FIL transformed China’s approach to foreign direct investment (FDI) by replacing a patchwork of approval-based rules with a unified framework. The law promotes “national treatment,” ensuring foreign investors are treated similarly to domestic ones, except in sectors outlined in the Negative List for Foreign Investment Access. The 2024 edition of this list, issued by the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) on 8 September 2024 and effective from 1 November 2024, reduced restricted and prohibited sectors to 29 from 31 in 2021, signalling progressive liberalisation. Prohibited sectors include news media, internet publishing, and audio-visual production, reflecting China’s tight grip on information and cultural industries. Restricted sectors, such as telecommunications and medical institutions, often require joint ventures with Chinese partners, with foreign equity typically capped at 50%.

Complementing the Negative List is the Market Access Negative List, which applies to both domestic and foreign investors. In April 2025, this list was trimmed to 106 items from 117 in 2022, easing barriers in sectors like hotel management and construction. Free Trade Zones (FTZs), such as those in Shanghai and Guangdong, operate under a separate FTZ Negative List, which is less restrictive but still enforces sector-specific rules. For example, while the 2024 Negative List lifted all manufacturing restrictions nationwide, FTZs had already relaxed these rules in 2021, offering British firms in fintech and professional services a testing ground for investment. However, inconsistencies between these lists can complicate compliance, and firms should seek expert guidance.

Sector-Specific Restrictions

Manufacturing: A New Era of Openness

The most significant reform in 2024 was the complete removal of foreign investment restrictions in manufacturing. Previously, sectors like publication printing and traditional Chinese medicine processing faced ownership caps or joint venture requirements. Effective 1 November 2024, these barriers were eliminated, allowing wholly foreign-owned enterprises to operate freely in manufacturing. This aligns with China’s “Made in China 2025” strategy, which prioritises high-end manufacturing and innovation. For UK firms in advanced manufacturing, such as aerospace or clean technology, this presents a golden opportunity to establish fully controlled operations, though local competition and IP risks remain concerns.

Services: Gradual Liberalisation

The service sector, critical for UK exporters in finance, healthcare, and technology, is undergoing cautious liberalisation. In telecommunications, pilot programmes in cities like Beijing, Shanghai, and Hainan, launched in April 2024 and expanded in 2025, relaxed foreign ownership restrictions for value-added services, including Internet Data Centres and Content Delivery Networks. The 2024 Negative List also removed foreign equity caps in app store services, reflecting China’s push to integrate AI and digital services. However, basic telecommunications services still require Chinese control, limiting foreign influence in core infrastructure.

Healthcare, a priority under the “Healthy China 2030” initiative, saw a landmark reform in 2024. A joint circular from MOFCOM, the National Health Commission, and the National Medical Products Administration permitted wholly foreign-owned hospitals in nine cities, including Beijing, Shanghai, and Hainan. This shift, effective from 1 November 2024, opens doors for UK biosciences firms, but strict regulations persist. Approvals for medical services and compliance with human genetic resource rules for research involving stem cells or gene therapy are mandatory, requiring robust due diligence.

Financial Services and Listed Companies

China’s financial sector, a stronghold for UK firms like HSBC, has seen progressive easing. The 2020 Negative List lifted equity caps for foreign investors in banking, securities, and insurance, allowing full ownership in certain financial services. In November 2024, rules for foreign investment in listed companies were relaxed, lowering the asset threshold for non-controlling investors from $100 million to $50 million and introducing tender offers as an approved investment method. These changes aim to attract capital to China’s stock markets, though geopolitical tensions and market volatility may temper enthusiasm.

Data, Cybersecurity, and Anti-Espionage Laws

China’s data and cybersecurity regulations pose significant challenges for foreign investors, particularly in tech-heavy sectors where the UK excels. The Cybersecurity Law of 2017, updated in 2024, mandates local storage of personal and “important” data and requires government approval for cross-border transfers. The Personal Information Protection Law (PIPL) of 2021 further tightens data handling, impacting firms in e-commerce and digital services. The Anti-Espionage Law, amended in July 2023, expanded its scope to include “documents, data, or materials” related to national security, raising concerns about vague enforcement. Foreign firms, including UK tech companies, must navigate these laws carefully, as compliance failures can lead to fines or operational bans. The CBBC recommends partnering with local legal experts to ensure adherence while protecting IP, especially in China’s first-to-file patent system.

Geopolitical and Trade Considerations

The U.S.-China trade war, escalating in 2025 with U.S. tariffs on Chinese goods reaching 145%, has ripple effects for foreign investors. Dual tariffs—125% on components imported into China and 145% on exports to the U.S.—complicate supply chains for manufacturers reliant on China for assembly. While the UK faces fewer direct trade barriers, China’s retaliatory measures, such as rare earths export controls in April 2025, underscore its economic leverage. British firms benefit from a stable UK-China relationship, reinforced by the UK-China Economic and Financial Dialogue (EFD) in 2025, which eased barriers in agri-food exports. However, the UK’s National Security and Investment Act (NSI) mirrors China’s scrutiny, requiring notifications for investments in 17 sensitive sectors, highlighting the need for transparency in bilateral deals.

Incentives and Challenges

China’s Catalogue of Encouraged Industries, updated in 2024, incentivises investment in high-tech fields like gene sequencing and green energy, offering tax breaks and land-use subsidies. The “24 Point Guidelines” of 2023 promote equal treatment in government procurement and streamline data flows, though local implementation varies. Despite these efforts, challenges persist. A 2023 CBBC survey found 73% of British multinationals faced restrictions, from opaque licensing to discriminatory procurement. The World Bank’s 2023 transparency score of 1.75 out of 5 reflects regulatory complexity, particularly for SMEs. Bureaucratic delays in profit repatriation and local competition further complicate operations.

Strategic Considerations for British Businesses

For UK firms, success in China hinges on strategic planning. The CBBC offers market insights and partner vetting, critical for navigating restrictions. Local partnerships can ease compliance, especially in restricted sectors like healthcare. Understanding consumer preferences and digital platforms like WeChat is vital, as is safeguarding IP through proactive registration. Collaborations, such as Westwell Holdings’ AI-powered trucks at Felixstowe port, showcase UK-China synergy in aligned sectors like AI and clean tech.

China’s investment regime is evolving toward greater openness, but restrictions in services, data, and sensitive sectors remain. For British businesses, the challenge is to balance compliance with ambition, leveraging China’s market while mitigating risks. With careful navigation, UK firms can capitalise on this dynamic economy, fostering mutual growth in a globally connected world.

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In 2019, China introduced a significant change to its individual income tax (IIT) system by implementing the “six-year rule” for foreigners. This rule, which starts applying in 2024, determines how foreign residents are taxed on their overseas income.

What is the six-year rule?

According to the revised IIT system, foreigners who reside in China for 183 days or more each calendar year are considered tax residents. If a foreign individual remains a tax resident for more than six years, they become liable for tax on their global income, including income from foreign sources. This is known as the “six-year rule.”

China’s tax rates are relatively high for high-income earners — 35% for annual taxable income between RMB 660,000 (approximately £70,250) and RMB 960,000 (approximately £102,183), and 45% for income exceeding RMB 960,000. Due to these rates, foreigners often seek to avoid IIT on their overseas income.

The year 2024 is crucial as it is the first time the six-year rule will be enforced. Foreigners should carefully review their tax residency status and consider strategies to reset their six-year period.

How is the six-year rule period counted?

On 16 March 2019, China’s Ministry of Finance (MOF) and State Taxation Administration (STA) issued Announcement [2019] No. 34, which outlines the calculation of tax residency for foreigners.

The key points from the announcement are as follows:

• The six-year period calculation starts from 1 January 2019. Any residency prior to this date does not count.
• A year of residence is defined as staying in China for at least 183 days within a calendar year.
• Days spent in China for less than 24 hours in a single day are not counted.

Example:

Mr Chen, a Hong Kong resident working in Shenzhen, travels to China every Monday morning and returns every Friday evening. His stays are less than 24 hours on Mondays and Fridays, and he spends weekends in Hong Kong. Hence, for tax purposes, Mr Chen is considered to be in China for only three days per week. With 52 weeks in a year, his total stay amounts to 156 days, which is fewer than the 183 days required to be a tax resident. Consequently, Mr. Chen’s overseas income remains tax-exempt in China.

Resetting the six-year rule period

According to the MOF STA Announcement [2019] No. 34, if a foreigner has stayed in China for fewer than 183 days in any year within the previous six years, or if they leave China for more than 30 consecutive days, they can reset the six-year period.

Example:

Ms Patel moved to Shanghai on 1 January 2015 and has been living there since. However, since the counting of years started only from 1 January 2019, Ms Patel is not yet subject to global income tax in China. To avoid worldwide income tax starting in 2025, Ms Patel decided to spend January and February 2024 in Hong Kong. By leaving China for over 30 consecutive days, Ms Patel resets her six-year period.

Tax Implications After Six Years

From 2025 onwards, if a foreign individual has lived in China for 183 days or more in each year over the previous six years and has not left for more than 30 consecutive days in any year, they will be taxed on their global income.

Example:

Mr. Zhang moved to Beijing on 1 January 2019. Except for a two-month absence in 2025, he has lived in China for at least 183 days each year and never left for over 30 days. His tax obligations in China are as follows:

In this example, Mr Zhang’s two-month absence in 2025 triggers the six-year rule, making him liable for global income tax starting in 2025, though his absence allows him to reset his tax obligations in 2026.

The six-year rule affects various types of income, including wages, service remuneration, author’s fees, royalties, business income, interest, dividends, lease income, property transfer income, and contingent income. Foreigners should manage their residence days and departure times carefully to avoid unexpected tax liabilities.

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Are there any sectors that L&P is specifically targeting from China?

London & Partners is focusing on supporting Chinese investment into areas where London is really strong or is looking to develop its global reputation in new tech of the future. This includes technology which London has traditionally been strong in, like FinTech, AI and green finance. Financial services and real estate are still big areas of interest, too. There’s also growing attention on creative industries, healthcare, and green energy as Chinese investors look for diverse opportunities in London.

What kind of London businesses has China traditionally invested in?

Chinese investors have traditionally put their money into real estate and financial services in London. But over time, we have seen this shift into technology, especially AI and FinTech, as well as renewable energy. This shift shows how Chinese companies are looking to get into new and innovative industries that fit with their global goals.

How has investment from China changed over the last decade?

Over the last ten years, Chinese investment in London has changed a lot. It started with a focus on real estate and infrastructure, but now Chinese companies are investing more in technology, healthcare and creative industries. There are more Chinese-led projects in London now (over 200 since 2013), that are creating jobs (more than 16,000 since 2013) and bringing in money (over £7.5 billion since 2013), which shows how Chinese investors are looking for new markets and advanced technologies.

What are the biggest opportunities for Chinese businesses investing in London?

London offers many opportunities for Chinese businesses, especially in technology, where it’s a world leader in FinTech and AI. There are opportunities for London and China to collaborate around technologies that are addressing some of the major challenges we both face – these are global challenges and need global solutions. London is good at that. Financial services are also a big draw because London is a major financial hub. London’s lively cultural scene offers unique chances in creative industries, and the city’s focus on sustainability makes it a great place for investments in green technology and energy.

How much does cultural influence and the UK’s soft power attract Chinese investors?

The UK’s cultural appeal plays a big role in attracting Chinese investors. London’s rich history, top universities and global arts scene make it a very attractive place for Chinese businesses. These factors, along with London’s reputation as an international hub, help bring in Chinese companies that want to build their global presence.

Are there any good examples of Chinese companies launching (or investing in) London in recent years?

Yes, several big Chinese companies are investing in London. For example, we have seen major commitments from Chinese electric vehicle manufacturers in the UK and London specifically. BYD, the world’s largest maker of electric vehicles, has set up its UK office in London and has delivered over 1,000 electric buses to the city. Chinese real estate developers are also buying and building properties in London. Plus, Chinese banks have opened offices in London, highlighting how important the city is for global finance. Overall, London is the second largest destination city for Chinese foreign direct investment (FDI), behind only Singapore.

How important is the tech business to London investment, and how does the UK compare with other major European markets when it comes to being regarded as a tech capital?

Technology is really important to why investors choose London. London is Europe’s leading and largest tech hub, especially in FinTech, AI and cybersecurity. It has grown in size over the last decade from $70 billion to over $620 billion, with more growth capital and unicorns than anywhere else in Europe. This strong tech scene attracts many Chinese investors, who find London’s mix of tech, financial services, and academic excellence particularly appealing.

2025 will see the first SXSW London – can you tell us more about how this came about and the reasons it is coming to London?

SXSW coming to London in 2025 is really exciting. London’s lively arts scene and strong focus on tech and creativity make it an ideal place for such an event. This decision shows that London is a leading city for fresh ideas and creative thinking.

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This article offers an overview of the essential information you need to know to open a bank account in China as a foreigner, including the general requirements, types of accounts and bank options.

Different types of bank accounts in China

It’s crucial to understand the different types of bank accounts available when opening a bank account in China, as each type has unique features and benefits. Like in many countries, the common types of accounts banks in China provide include:

• Savings accounts: Provided by most banks for both individual and corporate clients. They can be used for daily expenses and receiving salaries, with the primary purpose of saving funds.
• Current accounts: Ideal for individuals and businesses handling frequent expenses and payments. Current accounts generally offer little to no interest, as their primary function is facilitating transactions.
• Fixed or time deposit accounts: These allow you to earn a higher interest rate than savings accounts when holding your funds for a fixed term.
• Foreign currency accounts: Suitable for individuals and businesses in international trade, travel, or investment with frequent transactions in foreign currencies other than RMB.

Most major banks in China also offer business banking products and services, including corporate accounts, merchant accounts and payroll accounts. It is important to note that the specific features and benefits of an account can vary significantly between banks, and certain types of accounts may not be available at some banks.

Offshore accounts

If you are a foreign company incorporated and registered outside China, Hong Kong, Taiwan or Macau, you can choose from the following account options for non-resident business entities:

• Free trade non-resident (FTN): Made for overseas companies and only offered in the Hainan and Shanghai free trade zones. This account allows holders to enjoy convenient investment options and great currency exchange tools.
• Non-resident account (NRA): Can be opened with any Chinese bank, available in both Renminbi (RMB) and foreign currencies, preventing foreign exchange risk exposure. NRAs are not available for individuals but only for overseas corporations, primarily used for capital investment from overseas corporations in China.
• Offshore accounts (OSA): A rare form of a Chinese bank account used for conducting operations in foreign currencies, not RMB. The funds can only be sourced from and used for businesses outside China. You can only open an OSA at China’s Merchants Bank, China Bank of Communication, Pudong Development Bank, or Ping An Bank (formerly Shenzhen Development Bank).

What documents are required to open a bank account in China?

When opening a bank account anywhere in the world, you must provide the necessary documents to proceed. To open an account with most Chinese banks, you will have to provide the following required documents:

• Completed application form with your personal details
• Valid passport and visa details
• Proof of address
• Chinese phone number
• Valid work permit, business license or documents supporting employment or student status

In some cases, you may also be required to meet the bank representative in person to open a bank account in China.

Important: Different banks may require additional documents or details. We recommend checking with your chosen bank for accuracy.

How to open a bank account in China

The account opening process may vary slightly depending on each bank’s specific requirements or the type of account. Opening corporate accounts with banks in China also involves a more complex process than opening personal accounts, and banks may take longer to approve them.

The general account application process typically follows a standard procedure:

• Choose a bank: Consider factors such as bank reputation, digital banking capabilities and ease of opening the account. You can choose from the major banks in China, subsidiaries of international banks or traditional banking alternatives.
• Select an account type: Choose the type of bank account that suits your purpose.
• Prepare the required documents: This typically includes your passport, a valid visa or residence permit, proof of address and a work contract. Some banks may provide a document checklist in advance.
• Visit a branch: Generally, foreigners must open an account in person for identity verification. Some banks may require you to make an appointment in advance to ensure that you visit a branch accustomed to dealing with foreigners.
• Complete application forms: Fill out the necessary paperwork, which could be in Chinese. Some banks provide English forms or assistance for non-Chinese speakers. Ensure that you provide accurate and complete information.
• Set up banking tools: You will receive a bank card and instructions for setting up online banking, mobile banking apps, and other banking services. You may also have to make initial deposits.
• Verify and activate account: Some banks may require additional steps to verify and activate your account, especially for online and mobile banking services.

The “Big-Four” Banks in China

China is home to some of the world’s largest banks, mainly because they are government-owned and due to the centralised nature of the country’s financial system. There are currently 4,561 banking institutions and 184 registered commercial banks in China, including branches and subsidiaries of international banks such as Standard Chartered and Citibank. In 2022, the Chinese banking industry held a value exceeding USD 23 trillion according to Statista.

To help you narrow down your bank options, let’s look at the “big four” Chinese banks.

Bank of China (BOC)

The Bank of China is a major state-owned commercial bank, providing various financial services to individuals and enterprises. The Bank of China also has branches in multiple countries, regions, and major cities, including Hong Kong, the US, and the UK.

Key services offered by the Bank of China:

• Current all-in-one account: A current deposit account for personal use, allowing users to hold deposits in RMB and other foreign currencies, including USD, EUR, JPY, SGD and HKD.
• Personal foreign exchange savings account: Includes current savings, term deposit and call deposit accounts that can hold multiple foreign currencies.
• Corporate demand deposit account: A business account for holding deposits in RMB and other foreign currencies without a savings term.

Industrial and Commercial Bank of China (ICBC)

The Industrial and Commercial Bank of China (ICBC) is currently the largest bank in China and the world, with a total assets value of USD 6.12 trillion in 2023. ICBC has a substantial network of branches and subsidiaries in China and worldwide, renowned for its digital transformation and financial inclusion measures.

Key services offered by the Industrial and Commercial Bank of China:

• Current deposit account: An all-in-one current account allowing clients to deposit and withdraw cash in RMB and other foreign currencies.
• Corporate current deposit account: A current deposit account for corporate clients to save and manage cash in RMB.
• WeChat banking: Provides the flexibility to contact the help desk, access accounts and get financial information through WeChat.

Agricultural Bank of China (ABC)

The Agricultural Bank of China (ABC) is another central Chinese bank with branches across China and a few overseas, including the US, Australia, and Canada. It provides various financial products and services, including RMB Demand Deposit Accounts and the Farmer’s Benefit Credit Card. ABC is commended for supporting China’s agricultural sector and rural development.

Key services offered by the Agricultural Bank of China:

• RMB demand deposit account: A personal banking account for depositing, transferring and withdrawing funds in RMB.
• Personal fund collection: A service designed to centralise fund management across various accounts.
• Corporate demand deposit account: An RMB deposit account for enterprises to receive, pay and settle funds.

China Construction Bank (CCB)

China Construction Bank (CCB) is another large state-owned commercial bank, recognised for its efforts in fintech and sustainable development. CCB has almost 15,000 branches across mainland China and many more worldwide, including Europe, Australia, and Hong Kong.

Due to its expertise in asset management, CCB is a good option for companies in the manufacturing and construction business.

Key services offered by China Construction Bank:

• All-in-one account: A multi-currency current deposit account offering a seven-day call deposit with higher yields, requiring a minimum balance.
• RMB deposit accounts: Clients can choose between demand deposit and term deposit accounts to deposit funds in RMB.
• Corporate notification deposit account: Designed for enterprises with a minimum deposit of RMB 500,000, offering higher interest rates than demand deposits and more flexible withdrawals than term deposits.

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So, what is the minimum wage in China in 2023? Currently, Shanghai has the highest monthly minimum wage among China’s 31 provinces (RMB 2,690/£303 per month) and Beijing has the highest hourly minimum wage (RMB 26.4/£2.97 per hour). Sixteen regions – Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Anhui, Fujian, Shandong, Henan, Hubei, Guangdong, Chongqing, Sichuan, and Shaanxi – have surpassed the RMB 2,000 (£225) mark in their monthly minimum wage standards. At the lowest end of the wage spectrum, Liaoning has the lowest monthly minimum wage level in China at RMB 1,420 (£160)

How does China determine minimum wages?

Minimum wage standards are determined by provincial governments, taking into consideration factors such as the minimum living costs of local employees and their dependents, the consumer price index of urban residents, social insurance premiums, and the local employment situation.

It should be noted that the minimum wage excludes things like overtime pay, allowances for night shifts or special working environments, and subsidies for meals, transportation and housing.

In most regions, China’s minimum wage standards do include the social insurance premiums and housing fund contributions paid by employees. In fact, it is possible for an employee’s take-home pay to be lower than the corresponding minimum wage standard. Only a few regions, such as Shanghai, clearly stipulate that their local minimum wage standards exclude social insurance premiums and housing fund contributions.

Local governments in China are generally required to update their minimum wages every few years but have the flexibility to adjust wages according to local conditions.

Most provinces set different classes of minimum wage levels for different areas depending on the given region’s level of development and cost of living. For example, a higher minimum wage class is established for the provincial capital and the most developed cities in the province, whereas smaller cities and rural areas fall under a lower wage class.

How do minimum wages impact labour costs in China?

As China’s economy moves up the value chain and makes the transition to innovation and services, most workers employed by foreign-invested enterprises already earn above the minimum wage. For example, workers in Shanghai made an average of RMB 10,338 (£1,164) per month through 2020 – nearly four times the local minimum wage.

Employer social insurance and housing fund obligations add around an additional 37% to employers’ labour costs on top of the employees’ gross salary.

For foreign investors, rising wages are an unavoidable feature of doing business in China. Yet when other factors like productivity, infrastructure, transportation costs and access to a massive domestic market are considered, China may still emerge as the more cost-efficient option compared to countries with lower statutory labour costs.

When comparing locations for foreign investment into China, minimum wages are a helpful barometer to gauge labour costs across different regions. From there, identifying industry-specific wage levels, availability of talent and access to regional incentives offer a more nuanced view of the labour costs within a given region.

For a full breakdown of minimum wages in China by province and city, see this article by China Briefing

A version of this article was first published by China Briefing, which is produced by Dezan Shira & Associates. 

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The VAT incentives are meant to help vulnerable businesses overcome the difficulties of the Covid-19 pandemic and represent an extension of previous policies. A wide range of tax incentives and cuts have been put in place in China in the past few years to encourage and support economic growth.

In 2022, the country implemented record-high value-added tax credit refunds, which totalled about 2.4 trillion yuan. The new VAT exemption and reduction policies will be valid from 1 January 2023 to 31 December 2023.

If a small business has monthly sales under RMB 100,000 (approx. $14,740), or if the quarterly sales are under RMB 300,000 (approx. $44,220) for taxpayers who choose one quarter as a tax payment period, the taxpayer will not be subject to VAT.

This represents a lower threshold than in 2021 and 2022. During the period from 1 April 2021 to 31 December 2022, the VAT limit for small-scale taxpayers was RMB 150,000 (approx. $22,110) per month (or RMB 450,000 per quarter, approx. $66,300).

The VAT administration notice clarifies that small-scale taxpayers with total monthly sales of over RMB 100,000 – but whose sales when excluding real estate sales occurring in the current period is less than RMB 100,000 – will be exempt from paying VAT on the sale of goods, labour services and intangible assets.

Small businesses can choose to waive the VAT exemption incentive and instead issue special VAT invoices for a specific sale.

Between 1 January 2023 and 31 December 2023, small-scale taxpayers that are subject to a VAT levy rate of 3% can enjoy a reduced levy rate of 1%. The VAT items subject to a 3% VAT prepayment rate will enjoy a reduced prepayment rate of 1%.

An additional VAT deduction policy has also been issued for lifestyle and production-oriented services in 2023. Taxpayers in these sectors can enjoy 5% additional VAT deductions based on the deductible input VAT in the current period. Taxpayers in the lifestyle services sector can enjoy 10% additional VAT deductions based on the deductible input VAT in the current period. Production-oriented services include ‘postal services’, ‘telecommunication services’, ‘modern services’ and ‘lifestyle services’. Taxpayers in these sectors must have sales from ‘lifestyle services’ that represent more than 50% of their total sales.

Previously, taxpayers in the postal, telecommunications, modern services and lifestyle services industries were granted a 10% additional VAT deduction based on the deductible input VAT between 1 April 2019 and 31 December 2021, and taxpayers in lifestyle services enjoyed a 15% additional VAT deduction from 1 October 2019 to 31 December 2021. Tax authorities in China extended this additional VAT deduction policy to 31 December 2022.

In recent years, a key aspect of China’s new tax rules and policy directions has been tax incentives and cuts to boost the economy and encourage investment and research and development activities. At the same time, China is also making efforts to improve its tax administration environment, in particular the administration of transfer pricing issues relating to multinational enterprises.

The strict Covid-19 prevention measures imposed under China’s zero-covid policy significantly affected businesses and the economy in general. However, since the government decided to lift restrictions and quarantines, experts have raised their forecasts for China’s real GDP growth to 5.2% in 2023 (from 4.7%).

Adapting to a new reality and possible repeated surges of covid cases will be challenging for China. The government will have to consider creative ways to get the country’s economy back on track and rebuild businesses and investors’ confidence.

According to analysts, China may decide to extend most of the tax incentives that it has offered in the past, at least until the end of 2023. With respect to tax audits, there has also been a comparatively calmer tax audit environment in the past three years. However, China will continue to focus on improving its tax enforcement.

Tax authorities may become more aggressive in their enforcement activities in the future in order to plug the gap in tax revenue collection created by a slower economy and to make up for the reduction in tax revenue arising from various tax cut measures.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to connect with CBBC staff who can advise on company chops and other Chinese legal requirements.

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The news that the UK saw its warmest year on record in 2022 – and the prediction that this year could be even hotter – is yet another reminder of the urgent need to enable a low-carbon future. One of the many ways that this can be achieved is by pushing green finance into the mainstream.

2021 saw China become the world’s second-largest green bond market according to HSBC (issuing over RMB 600 billion of green bonds, a 180% increase on 2020), as the country rolled out funding to support the vast array of clean and renewable infrastructural projects that will be required to meet its ambitious net zero targets. The UK financial sector, for its part, has played a world-leading role in developing such instruments from their inception, and is well-placed to work together with Chinese partners in pursuing common goals.

Green finance can be defined as financial regulations, standards, products or investments that pursue environmental goals, including climate change adaptation and mitigation, and biodiversity. Over the past decade, the UK and China have established strong partnerships in the field of green finance, becoming world leaders in responding to the transition to a green economy. In a speech in London at City Week 2022 last April, Chinese Ambassador Zheng Zeguang spoke of the “broad space for China-UK cooperation on green development” and noted that a March 2022 conversation between President Xi Jinping and then Prime Minister Boris Johnson had highlighted cooperation in green financial services and the digital economy.

The UK-China Green Finance Centre, co-established by the City of London and the Green Finance Committee of the China Society for Finance and Banking, has spearheaded UK-China collaboration in green finance, and continues to serve as a key platform for leading industry and policy experts to develop market-led solutions to help scale up green finance in both countries – as well as globally.

At the Second Belt and Road Forum for International Cooperation held in Beijing in 2019, the UK-China Green Finance Taskforce (UKCGFC) announced the formation of the Secretariat for the Green Investment Principles for the Belt and Road (GIP), and the first list of signatories, including HSBC. The goal of the GIP is to encourage and assist signatories to better integrate environmental considerations into the decision-making and implementation processes of their investments in the region. Today, the number of GIP signatories stands at 40, with overall assets amounting to over $48 trillion worldwide.

The UKCGFC is supported by the UK Government through the China-UK PACT (Partnering for Accelerated Climate Transitions) programme. Since it launched in 2018, UK PACT has funded eight projects in China with the aim of helping the country reach its goal of reaching carbon neutrality by 2060. The newest round of projects, which started in 2021, includes a project to help financial institutions make greener decisions through climate-related disclosure and transparency, and “a project to improve the uptake of Environmental, Social and Corporate Governance (ESG) measures by the Chinese investment community, as well as to accelerate finance transition through the creation of a China-UK leadership forum, jointly led by the City of London Corporation and the Beijing Institute of Green Finance and Sustainability (BIFS).”

In terms of specific financial support, the London Stock Exchange’s Green Economy Mark identifies listed companies and funds contributing to the global green economy by addressing key environmental objectives such as climate mitigation and adaptation, waste and pollution reduction and transitioning to a circular economy. More than 100 companies and funds with a combined market cap of $140 billion have received the Mark since its launch in 2019. In 2020, Yangtze Power became the first Chinese issuer to receive the London Stock Exchange’s Green Economy Mark, certifying that the company generates more than 50% of its revenues from green products or services, according to FTSE Russell’s Green Revenues Data Model.

In November 2021, the Bank of China listed $2.2 billion in sustainable bonds on the London Stock Exchange. The bonds include the Sustainability Re-Linked Bond (SRLB), which will fund loan projects linked to sustainable development in industries such as tourism, trade, manufacturing and warehousing.

The post Explained: China & the UK’s green finance initiatives appeared first on Focus - China Britain Business Council.